Compliance officers at financial institutions feel they still have a low understanding of digital assets, blockchain, and their surrounding legal issues. That was the main takeaway from a two-hour workshop hosted by RAW Compliance and featuring the Bitcoin Association‘s Southeast Asia Manager, Ella Qiang.
Wallet security, digital asset ATM networks, and the speed at which money can move around and exit the blockchain space remained the primary realistic concerns for those involved—rather than past-hyped stories such as darknet markets and theoretical “51% attacks.” However terrorist financing could still be a concern due to anyone’s ability to post a public address anywhere on the internet and receive funds from any source, anywhere in the world.
Many issues could be met with “traditional” investigative methods and there were perhaps more problems concerning more common financial crimes that used digital assets, like investment scams, extortion, and money laundering.
It was also clear that blockchain itself is a constantly changing industry. Its almost-daily new developments can easily leave those impacted by it (but who aren’t direct participants) with outdated information and a lack of understanding of what they should be focusing on.
RAW Compliance (which stands for “Real Authentic Awareness”) is a networking group for compliance officers that enables them to gather, share opinions and discuss issues impacting their work, particularly on cultural and technological issues.
The March 17 session, held via Zoom, was Part 4 in a six-part series of events designed to bring compliance officers together with blockchain forensics investigators, law enforcement veterans, advocacy groups, and those representing digital asset businesses themselves, such as exchanges.
Wide range of blockchain risk experience
Joining Ella Qiang were speakers Scott Johnston (former Met Police officer in the U.K. and now with Chainalysis), Onchain Custodian CEO and co-founder Alexandre Kech, Chief Compliance Officer at 100x Group (parent company of BitMEX) Malcolm Wright, Merkle Science’s Ian Lee, Inca Digital Head of Investigations Paul Marrinan, AML Expert at Minerva Stratagem Consulting Dev Odedra, and investigator Adebayo Tiamiyu.
Host Oonagh Van Den Berg reminded participants their role is not to be “business prevention officers” and that the industry needed to build from a risk perspective, rather than being automatically suspicious of any activity involving this (relatively) new technology. Though large knowledge gaps still existed and participants may not fully understand the types of risks they should be looking for, they shouldn’t be afraid to ask questions and challenge leaders in their own organizations in order to work effectively.
Qiang noted that courts have recently ruled that “crypto assets” count as property, setting the legal framework for managing related issues. However, the situation regarding digital asset mining…